Community takeover!

Memecoins are becoming very popular these days with the likes of Dogecoin, Pepe, and Pnut (a memecoin inspired by the pet squirrel turned social media sensation). While they grab the headlines when their price skyrockets in just a matter of hours, they also comes with high risks.

The dangers lie in the memecoin’s founding team, who often remain anonymous. Tactics include “pump and dump”—hyping up the coin and then quickly selling at the peak, causing the price to collapse.

Another tactic is a “rug pull” – this is when the founding team suddenly take all of investor’s money (the liquidity) and disappear. This is exactly what happened to a memecoin called Dubcat. However, after the rug pull, the investors regrouped and took over the management of the coin and its community in what is known as a community takeover (CTO).

The CTO leader goes by the name Shammy (or Bit Shamen) and spoke to The Crypto Radio about the experience.

Shammy has already run a community called the Gem Hunters, which he founded in 2017, so has plenty of experience in this field. 
“The whole idea was to bring beginners together so everybody could learn. My speciality is trying to educate people, but in a way where I'm on the same level. A lot of influencers are kind of putting themselves on a pedestal, where they're acting as though they're better, they're up here, whereas I try and put myself down there with the investors.”

During our one-hour interview with UK-based Shammy, he was true to his word in explaining all the jargon and terminology he was using. “A community takeover is where a project will scam the community, or rug pull. The community comes in and buys up the supply really cheap, and then as a collective, they then work together to run the project.”

For Dubcat, they took over the project six months ago when it had a $30,000 market cap and have seen it rise to as high as $9.5 million as the community has grown. Alongside the community spirit, investors can make money too.

“Don't get me wrong, I'm not even sitting here saying it's all been singing and dancing and rainbows and daisies. It's been tough as well. You know, a lot of stress, and there's a lot of hand holding involved with newer, less experienced people who've not made the money.”

Dubcat was run by a “cabal”—a small bunch of major investors (whales), who owned the majority of the coin’s supply. Between them, they could easily move its price. Once they exited the project, the CTO started to take shape, although it wasn’t actually planned.

“It's a very good story because the only reason why Dubcat works is because the right kind of people came together. There was a lot of people involved, who were the wrong kind of people. But you have to weed those out.

"Everybody loves a good story, and they're driven initially by hype and FOMO. And we did get a surge during the early days where everyone came in. It was like the place to be. It was fun and and it still is.”

The Dubcat community has become a social platform and has already planned a Christmas party, yacht parties for next year, and a group to visit crypto conferences together. “I feel like this is going to be more than a coin. It's a movement, you know.”

But even CTOs are now at the mercy of scammers, who have spotted the rise in popularity of CTO memecoins. Some are claiming their coin is a CTO when it’s run by just one person, or a cabal.

“The whole idea with Dubcat was that we're going to be the most transparent, authentic community takeover. And it's not easy to do that, because you've got to weed out all the non-believers.”

 

Listen to the whole interview on The Crypto Radio's live player or in our Community podcast.